Building a Bridge between Marketing and Finance

13 Pages Posted: 1 Mar 2023

See all articles by Ryan Barker

Ryan Barker

BERA Brand Management

Gregory V. Milano

Fortuna Advisors LLC

Date Written: Spring/Summer 2018

Abstract

Corporate finance executives are often frustrated by spending proposals from their marketing colleagues but cannot seem to be able to quantify the putative benefits. Similarly, the marketing staff is frustrated by the finance team's inability to convert soft marketing metrics, such as “awareness” and “customer satisfaction” into financial forecasts. The challenge is that neither marketers nor finance executives have been able to articulate a single analytical framework which both explains how and why brands come to flourish or flounder and how brand growth contributes to the business's short and long term bottom line. Lacking an effective way to do this now, most managers default to using the hard data they do have, namely how marketing investment is likely to impact sales this quarter and next. This reinforces the widespread focus on quarterly EPS and reduces the perceived value of the marketing department to their ability to hit three month sales targets. This degraded view of marketing's contribution and the inability to link “soft” marketing metrics to longer term financial returns impedes building long‐term brand value. This article focuses on how advances in behavioral science and financial analytics offer an effective way to bridge this gap between marketing and finance. Building that bridge requires better measures of brand health and financial performance to allocate capital and marketing resources. Undoubtedly, brand building is both an art and a science. But, the finance people can develop an evidence‐based framework explaining how some of the “softer” investments such as brand building, contribute to the value of the firm.

Suggested Citation

Barker, Ryan and Milano, Gregory Vincent, Building a Bridge between Marketing and Finance (Spring/Summer 2018). Journal of Applied Corporate Finance, Vol. 30, Issue 2, pp. 29-39, 2018, Available at SSRN: https://ssrn.com/abstract=3233223 or http://dx.doi.org/10.1111/jacf.12297

Ryan Barker (Contact Author)

BERA Brand Management

United States

Gregory Vincent Milano

Fortuna Advisors LLC ( email )

822 N. A1A Highway
Suite 310
Ponte Vedra Beach, FL 32082
United States

HOME PAGE: http://www.fortuna-advisors.com

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